BILL ANALYSIS Ó SB 398 Page 1 Date of Hearing: July 13, 2015 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair SB 398 (Leyva) - As Amended June 2, 2015 SENATE VOTE: 31-9 SUBJECT: Green Assistance Program. SUMMARY: Establishes the Green Assistance Program (GAP) to be administered by the Secretary for Environmental Protection (Secretary) in concert with environmental justice programs. EXISTING LAW, under the California Global Warming Solutions Act of 2006 (AB 32): 1)Requires the Air Resources Board (ARB) to adopt a statewide GHG emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions. 2)Establishes the Greenhouse Gas Reduction Fund (GGRF); requires that all funds, except for fines and penalties, collected pursuant to a market-based mechanism be deposited in the fund; and requires the Department of Finance, in consultation with ARB and any other relevant state agency, to develop a three-year investment plan for the GGRF. SB 398 Page 2 3)Requires that the GGRF be used to facilitate the achievement of GHG emissions reductions in the state consistent with AB 32 and the investment plan. 4)Requires the investment plan to allocate a minimum of 25% of the funds to projects that benefit disadvantaged communities and to allocate 10% of the funds to projects located within disadvantaged communities. 5)Requires ARB, in consultation with the California Environmental Protection Agency (CalEPA), to develop funding guidelines for administering agencies receiving allocations of the GGRF that include a component for how agencies should maximize benefits to disadvantaged communities. THIS BILL: 1)Establishes GAP, and requires the Secretary to administer the program in concert with environmental justice programs. 2)Requires GAP to provide technical assistance to small businesses and small nonprofits, as defined by the Secretary, and disadvantaged communities applying funding from the GGRF. The technical assistance may include: a) Basic information on available programs, eligibility requirements, and deadlines; and, b) Referrals to designated contact people in agencies administering the programs. SB 398 Page 3 3)Requires the Secretary to conduct outreach activities to inform eligible entities about the GAP. Authorizes the Secretary to coordinate outreach activities with other state agencies, local agencies, and nonprofits. 4)Requires that GAP use existing resources appropriated by the Legislature in the annual Budget Act. FISCAL EFFECT: According to the Senate Appropriations Committee, this bill creates cost pressures in the hundreds of thousands to low millions of dollars from the General Fund or the GGRF to CalEPA for technical assistance and outreach. COMMENTS: 1)This bill. According to the author: Currently, there is no single place for small communities and businesses to turn to for assistance in accessing funds for mitigating the impacts of poor air quality. Housed at CalEPA, the GAP will provide small communities and businesses with information on all of the funding available and assistance on how to apply for funding at various agencies. As more funding becomes available, the state must ensure that every city and business has the same ability to participate in creating healthier neighborhoods. 2)AB 32. As part of AB 32's direction that ARB adopt a statewide GHG emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically feasible and cost-effective GHG emission reductions, AB 32 requires ARB to prepare and approve a Scoping Plan at SB 398 Page 4 five-year intervals. The first Scoping Plan, adopted by ARB in 2008, described the specific actions ARB and others must take to reduce statewide GHG emissions to 1990 levels by 2020. Pursuant to AB 32, the reduction measures identified in the Scoping Plan had to be proposed, reviewed, and adopted as individual regulations by January 1, 2011, to become operative beginning on January 1, 2012. According to ARB, a total reduction of 80 million metric tons (MMT), or 16% compared to business as usual, is necessary to achieve the 2020 limit. Approximately 78% of the reductions will be achieved through identified direct regulations. ARB intends to achieve the balance of reductions necessary to meet the 2020 limit (approximately 18 MMT) through a cap-and-trade program that covers an estimated 600 entities. In May 2014, ARB adopted a Scoping Plan update. The Scoping Plan update discusses the objective of achieving an 80% reduction by 2050 and the need for a midterm target, but does not propose or adopt a specific target. According to ARB, the update defines ARB's climate change priorities for the next five years and sets the groundwork to reach California's long-term climate goals. The 2014-15 Budget Act allocates cap-and-trade revenues for the 2014-15 Fiscal Year and establishes a long-term plan for the allocation of cap-and-trade revenues beginning in Fiscal Year 2015-16. The Budget continuously appropriates 35% of cap-and-trade funds for investments in transit, affordable housing, and sustainable communities. Twenty-five percent of the revenues are continuously appropriated to continue the construction of high-speed rail. The remaining 40% will be appropriated annually by the Legislature for investments in programs that include low-carbon transportation, energy efficiency and renewable energy, and natural resources and waste diversion. In addition to reducing GHG emissions, 25% SB 398 Page 5 of the proceeds from the GGRF must also go to projects that provide a benefit to disadvantaged communities, as identified by the California Environmental Protection Agency (CalEPA). A minimum of 10% of the funds must be for projects located within those communities. In his January 5, 2015 Inaugural Address, Governor Brown announced the following objectives: 1) Increase the amount of renewable energy used in California from 33% to 50%; 2) Reduce petroleum use in cars and trucks by up to 50%; and, 3) Double the efficiency of existing buildings and make heating fuels cleaner. 3)Disadvantaged communities. In October 2014, CalEPA released its list of disadvantaged communities based on the California Communities Environmental Health Screening Tool (CalEnviroScreen), a tool that assesses all census tracts in California to identify the areas disproportionately burdened by and vulnerable to multiple sources of pollution. Areas identified as disadvantaged by CalEnviroScreen 2.0 include the majority of the San Joaquin Valley; much of Los Angeles and the Inland Empire; pockets of other communities near ports, freeways, and major industrial facilities such as refineries and power plants; and large swaths of the Coachella Valley, Imperial Valley and Mojave Desert. Each of the programs administering funds from the GGRF have separate guidelines and grant proposal request documents on their respective websites. Eligibility criteria and application processes vary, as do recommendations about working with the administering agency to develop proposals or applications. For those small organizations and disadvantaged communities lacking experience in this area, assistance such as that proposed by this bill may help them successfully apply for and utilize the funding available. REGISTERED SUPPORT / OPPOSITION: SB 398 Page 6 Support American Lung Association in California Asian Pacific Environmental Network Breathe California California Bicycle Coalition California Environmental Justice Alliance California League of Conservation Voters Clean Water Action Climate Resolve Coalition for Clean Air Environmental Defense Fund Leadership Counsel for Justice and Accountability Lutheran Office of Public Policy, California SB 398 Page 7 Move LA National Resource Defense Council Physicians for Social Responsibility ReLeaf Sierra Club California Strategic Concepts in Organizing and Policy Education Trust for Public Lands Union of Concerned Scientists Valley Clean Air Opposition None on file SB 398 Page 8 Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916) 319-2092